The Fossil Fuel Levy (Amendment) Regulations 2001

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Fossil Fuel Levy Regulations 1990 (“the Principal Regulations”) (S.I. 1990/266). They come into force on being made on 27th March 2001. Any reference in this note to a numbered regulation is a reference to the regulation bearing that number in the Principal Regulations.

There are a various minor and consequential changes, however the main changes of substance are to adapt the Principal Regulations to the absence of the electricity pool following the introduction of the new electricity trading arrangements on 27th March 2001 and to make provision for payments out of levy to be made to the nominated person (as defined in the Electricity from Non-Fossil Fuel Sources Saving Arrangements Order 2000 (S.I. 2000/2727) instead of to the public electricity suppliers.

Regulation 5 sets out the method of calculating the amounts to be paid to or by the nominated person pursuant to section 33(5) and (5A) of the Electricity Act 1989. This includes provision for the nominated person to be reimbursed its costs which are reasonably incurred in relation to the sale and purchase of electricity which has been generated pursuant to qualifying arrangements. Regulation 5A provides that the Authority is to determine a debt recovery procedure with the aim of ensuring the prompt collection of debts owed to the nominated person.

Regulation 6 re-expresses the method to be used by the Authority in calculating the rate of levy—the method is now set out in a narrative rather than formulaic manner, with the result that Schedules 1, 2 and 3 have been omitted. The method has also been modified to take into account the absence of the electricity pool and the fact that payments out of levy are to be paid to (or may be received from) the nominated person.

Regulation 6 also includes a requirement on the Authority to calculate or review the levy rate at least once every 12 months. The Authority no longer has to calculate the rate of the levy with reference to a specific levy year (which previously commenced on 1st October each year). Before notifying licensed suppliers and the nominated person of the levy rate the Authority must consult the Secretary of State.

Regulations 15 and 19 have been omitted. Regulations 20 and 21 have been amended to remove the concept of supply below market price as this was reliant on the existence of the electricity pool. These regulations now refer to supply below purchase price.

Regulation 28 has been amended to make provision for payments to be made to the nominated person and for these payments to be made on the fifth banking day of each qualifying month.

Regulations 33, 37 and the Schedule (which was previously Schedule 4) have been amended to impose information provision and retention requirements on the nominated person.

The original regulations 41 and 42 have been omitted. New regulation 41 makes provision for payments to be made by the nominated person to the Authority. New regulations 42 and 43 make provision for the correction of over and under-payments made to or by the nominated person.

Regulation 44 makes transitional provision for the Principal Regulations to be treated as not having been amended by these Regulations in relation to payments to public electricity suppliers where entitlement to those payments accrued to prior to 27th March 2001.